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Here’s why Ukraine is suing Russia in the International Court of Justice

Ukraine’s case in the ICJ looks like a device to avoid paying the likely High Court Judgment for payment of the $3 billion debt Ukraine owes Russia.

Alexander Mercouris

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The case Ukraine is bringing in the International Court of Justice is attracting scant international attention and has been almost entirely ignored by Western governments and by the Western media.  Having said this it is an interesting case which begs a number of obvious questions.

Ukraine’s claim is set out in an indictment which apparently runs to 45 pages.  The summary of its claim, which is dated 17th January 2017, can be found here.

Essentially Ukraine is demanding compensation from Russia for the damage it says Russia has done to Ukraine through its aggression in eastern Ukraine and because of the harm Ukraine alleges Russia is doing to the Ukrainian and Tatar minorities in Crimea.

Two questions about this case immediately stand out: (1) its timing; and (2) why does it fail to ask that the International Court of Justice declare that Crimea’s unification with Russia is contrary to international law?

(1) Timing of the Case

The case was brought on 16th January 2017, three years after the Maidan coup, three years after Ukraine and Russia found themselves in conflict with each other, and almost three years after Crimea seceded from Ukraine and united with Russia and eastern Ukraine rose up against the new Maidan government in Kiev.

Why has this case been brought only now?

There is in fact an obvious answer to this question.  In January 2017, when this case was brought, the High Court in London finished hearing Russia’s application for summary Judgment in the case Russia has brought against Ukraine for payment of the $3 billion eurobond debt Ukraine owes Russia.  A decision is expected in April.

Ukraine’s defence in this case is that it does not owe Russia any money because of the amount of the $3 billion debt has been extinguished by the far greater amount Ukraine says Russia owes Ukraine arising from the damage Russia did to Ukraine as a result of its aggression in eastern Ukraine.

I have always said that I believe that the High Court is likely to rule that it has no jurisdiction to hear this defence to the Russian claim.  Way back on 21st April 2015, long before the case was brought, I explained why I thought this defence was unlikely to succeed

The debt is not repayable because Russia has made its repayment impossible by committing military aggression against Ukraine

Russia categorically denies it is committing aggression against Ukraine.

The Russians would undoubtedly argue that the question of whether or not Russia is committing aggression against Ukraine has been answered in their favour by Ukraine’s signature to the Minsk Memorandum. This treats the Ukrainian conflict as a civil war and commits Ukraine to a process for its settlement.

The High Court would anyway almost certainly refuse to look at this question. It would probably again say this a matter for the International Court of Justice. It is anyway doubtful even if Ukraine could persuade the High Court that Russia had committed aggression against Ukraine that this cancels Ukraine’s whole debt.

(bold italics added)

It seems to me that what has happened is that Ukraine’s lawyers have now given Ukraine the same advice.

They must have told Ukraine that Ukraine is likely to lose the case in the High Court because the High Court will almost certainly say it has no jurisdiction to hear Ukraine’s defence since the question of whether Ukraine is entitled to compensation from Russia because of Russia’s alleged aggression against Ukraine is not an issue the High Court in London is able to decide.  The High Court will almost certainly say this is a matter for the International Court of Justice.

Ukraine has therefore brought its claim in the International Court of Justice in order to pre-empt what looks like a Judgment against it in the High Court.

Possibly Ukraine is hoping to persuade the High Court to stay enforcement of its Judgment until after the International Court of Justice has made its decision.  If so then it is unlikely to succeed.  The High Court is most unlikely to order a stay of one of its Judgment for payment of a debt until another court makes a ruling on an entirely different matter.

More likely Ukraine is hoping to persuade the IMF – with which it is currently negotiating for further funding, and whose Board is due to review its lending to Ukraine on 20th March 2017 – to disregard any Judgment the High Court makes which declares Ukraine in default of its debt to Russia on the grounds that the question of whether Ukraine owes money to Russia will not be finally decided until the International Court of Justice makes its decision.

Russia is a member of the exclusive Paris Club of creditors.  The IMF is supposed to stop all lending to Ukraine if the High Court declares Ukraine is in default of its debt to a member of the Paris Club.  Presumably Ukraine is hoping that the IMF, which has already relaxed this rule, will set it aside completely in Ukraine’s favour on the basis that the question of whether Ukraine owes money to Russia will not be finally decided until the International Court of Justice makes its decision.

If this is the argument Ukraine intends to make to the IMF (which I suspect it is) then legally speaking it is desperate.

Even if Ukraine wins its case against Russia in the International Court of Justice, any compensation it is awarded cannot be enforced against Russia through the ordinary courts.  It would be entirely up to Russia to decide whether or not to pay it.  Russia would almost certainly refuse to pay it.

By contrast since the claim Russia is bringing against Ukraine in the High Court is for payment of a eurobond (which is a promissory note) any Judgment Russia obtains against Ukraine can be enforced immediately.

There are therefore no logical or legal grounds for the IMF to say that Ukraine is not in default to Russia if the High Court says it is, simply because Ukraine is bringing a case against Russia in the International Court of Justice.

At this point however a word of caution is in order.  Since the IMF has been lending to Ukraine for essentially political reasons all along, a cynic might say it will accept whatever argument Ukraine makes however legally dubious or threadbare it might be so that it can continue lending to Ukraine irrespective of what it’s own rules say.

All I would say about that is that that may indeed happen but if it does then legally speaking we are in unknown territory, with the Russians quite possibly in that case seeking to enforce their Judgment by taking legal action in the US and European commercial courts to seize Ukraine’s IMF bailout funds.  That would be an extraordinary and unprecedented situation, and I do not know what the eventual outcome or the long term repercussions would be, and I doubt anyone else does either.  However I suspect the long term repercussions would be huge, and I also suspect that there are people within the IMF’s bureaucracy who think the same and who will if only for that reason be counselling against it.

The High Court is expected to decide whether or not to grant Russia’s application for summary Judgment in April.  The stakes could not be higher.  That makes it understandable why Ukraine has brought its case in the International Court of Justice now, however desperate legally speaking that course might be.

(2) Crimea

Putting aside these highly technical (though potentially very important) issues,  the single most striking omission in the case is that though Ukraine repeatedly refers in its claim to Crimea’s unification with Russia as an ‘illegal occupation’, and claims compensation for the alleged ‘discrimination’ and ‘oppression’ by Russia of Ukrainian and Crimean Tatar minorities in Crimea, it does not actually seek a declaration from the International Court that the unification of Crimea with Russia is contrary to international law.

The reason Ukraine has failed to do this is because its lawyers have undoubtedly advised it that if it were to seek such a declaration the International Court of Justice would refuse to grant it.

This is because the International Court of Justice in its Advisory Opinion on Kosovo has previously ruled that a declaration of independence made by the people of a territory declaring themselves independent of a country to which that territory belongs are not acting contrary to international law even if their action is made unilaterally, is backed by the use of force (including outside force), and is contrary to the constitutional arrangements and laws of the country from which they are declaring themselves independent.

The Western powers lobbied the International Court of Justice hard to obtain the Advisory Opinion on Kosovo.  When they obtained it they hailed it as a famous victory.  Since then they have come to regret it bitterly, and since Crimea cited it in its unilateral declaration of independence from Ukraine they have completely stopped talking about it.

The Russians by contrast talk about the Advisory Opinion on Kosovo whenever the subject of the alleged ‘illegality’ of Crimea’s unification with Russia is brought up.  President Putin was the first to do so in the speech he made immediately following Crimea’s unification with Russia on 18th March 2014

As it declared independence and decided to hold a referendum, the Supreme Council of Crimea referred to the United Nations Charter, which speaks of the right of nations to self-determination. Incidentally, I would like to remind you that when Ukraine seceded from the USSR it did exactly the same thing, almost word for word. Ukraine used this right, yet the residents of Crimea are denied it. Why is that?

Moreover, the Crimean authorities referred to the well-known Kosovo precedent – a precedent our western colleagues created with their own hands in a very similar situation, when they agreed that the unilateral separation of Kosovo from Serbia, exactly what Crimea is doing now, was legitimate and did not require any permission from the country’s central authorities. Pursuant to Article 2, Chapter 1 of the United Nations Charter, the UN International Court agreed with this approach and made the following comment in its ruling of July 22, 2010, and I quote: “No general prohibition may be inferred from the practice of the Security Council with regard to declarations of independence,” and “General international law contains no prohibition on declarations of independence.” Crystal clear, as they say.

I do not like to resort to quotes, but in this case, I cannot help it. Here is a quote from another official document: the Written Statement of the United States of America of April 17, 2009, submitted to the same UN International Court in connection with the hearings on Kosovo. Again, I quote: “Declarations of independence may, and often do, violate domestic legislation. However, this does not make them violations of international law.” End of quote. They wrote this, disseminated it all over the world, had everyone agreed and now they are outraged. Over what? The actions of Crimean people completely fit in with these instructions, as it were. For some reason, things that Kosovo Albanians (and we have full respect for them) were permitted to do, Russians, Ukrainians and Crimean Tatars in Crimea are not allowed. Again, one wonders why.

(bold italics added)

By failing to ask the International Court of Justice to declare Crimea’s secession from Ukraine and subsequent union with Russia to be contrary to international law Ukraine appears to be conceding the point.  Though Ukraine and its Western allies will doubtless go on calling Crimea’s secession from Ukraine ‘illegal’, in terms of international law there are actually no grounds to do so.  Ukraine’s conduct of its case in the International Court of Justice effectively admits as much.

As to the eventual outcome of the case, I am not an expert in this field.  I understand the Russians are denying that the International Court of Justice has the jurisdiction to hear the case.   I suspect they are right and that the International Court of Justice will agree with them.

Even if it doesn’t and even if the case goes to a full hearing – which may take years – I doubt Ukraine will be able to prove many of the claims it is making, or that it will achieve much or indeed anything in the end by bringing the case.  The stony silence of Western governments and of the Western media about the case all but says as much.

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US-China trade war heats up as surplus hits record $34 Billion (Video)

The Duran – News in Review – Episode 136.

Alex Christoforou

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According to a report by the AFP, China’s trade surplus with the United States ballooned to a record $34.1 billion in September, despite a raft of US tariffs, official data showed Friday, adding fuel to the fire of a worsening trade war.

Relations between the world’s two largest economies have soured sharply this year, with US President Donald Trump vowing on Thursday to inflict economic pain on China if it does not blink.
The two countries imposed new tariffs on a massive amount of each other’s goods mid-September, with the US targeting $200 billion in Chinese imports and Beijing firing back at $60 billion worth of US goods.

“China-US trade friction has caused trouble and pounded our foreign trade development,” customs spokesman Li Kuiwen told reporters Friday.

But China’s trade surplus with the US grew 10 percent in September from a record $31 billion in August, according to China’s customs administration. It was a 22 percent jump from the same month last year.

China’s exports to the US rose to $46.7 billion while imports slumped to $12.6 billion.

China’s overall trade — what it buys and sells with all countries including the US — logged a $31.7 billion surplus, as exports rose faster than imports.

Exports jumped 14.5 percent for September on-year, beating forecasts from analysts polled by Bloomberg News, while imports rose 14.3 percent on-year.

While the data showed China’s trade remained strong for the month, analysts forecast the trade war will start to hurt in coming months.

China’s export jump for the month suggests exporters were shipping goods early to beat the latest tariffs, said ANZ’s China economist Betty Wang, citing the bounce in electrical machinery exports, much of which faced the looming duties.

“We will watch for downside risks to China’s exports” in the fourth quarter, Wang said.

Analysts say a sharp depreciation of the yuan has also helped China weather the tariffs by making its exports cheaper.

“The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi (yuan),” said Julian Evans-Pritchard, China economist at Capital Economics.

“With global growth likely to cool further in the coming quarters and US tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained,” he said.

According to Bloomberg US President Donald Trump’s new U.S.-Mexico-Canada Agreement isn’t that different from the North American Free Trade Agreement that it replaced. But hidden in the bowels of the new trade deal is a clause, Article 32.10, that could have a far-reaching impact. The new agreement requires member states to get approval from the other members if they initiate trade negotiations with a so-called non-market economy. In practice, “non-market” almost certainly means China. If, for example, Canada begins trade talks with China, it has to show the full text of the proposed agreement to the U.S. and Mexico — and if either the U.S. or Mexico doesn’t like what it sees, it can unilaterally kick Canada out of the USMCA.

Although it seems unlikely that the clause would be invoked, it will almost certainly exert a chilling effect on Canada and Mexico’s trade relations with China. Forced to choose between a gargantuan economy across the Pacific and another one next door, both of the U.S.’s neighbors are almost certain to pick the latter.

This is just another part of Trump’s general trade waragainst China. It’s a good sign that Trump realizes that unilateral U.S. efforts alone won’t be enough to force China to make concessions on issues like currency valuation, intellectual-property protection and industrial subsidies. China’s export markets are much too diverse:

If Trump cuts the U.S. off from trade with China, the likeliest outcome is that China simply steps up its exports to other markets. That would bind the rest of the world more closely to China and weaken the global influence of the U.S. China’s economy would take a small but temporary hit, while the U.S. would see its position as the economic center of the world slip into memory.

Instead, to take on China, Trump needs a gang. And that gang has to be much bigger than just North America. But most countries in Europe and East Asia probably can’t be bullied into choosing between the U.S. and China. — their ties to the U.S. are not as strong as those of Mexico and Canada. Countries such as South Korea, Germany, India and Japan will need carrots as well as sticks if they’re going to join a U.S.-led united trade front against China.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the escalating trade war between the United States and China, and the record trade surplus that positions China with a bit more leverage than Trump anticipated.

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Via Zerohedge Trump Threatens China With More Tariffs, Does Not Seek Economic “Depression”

US equity futures dipped in the red after President Trump threatened to impose a third round of tariffs on China and warned that Chinese meddling in U.S. politics was a “bigger problem” than Russian involvement in the 2016 election.

During the same interview with CBS’s “60 Minutes”, in which Trump threatened to impose sanctions against Saudi Arabia if the Saudis are found to have killed WaPo reported Khashoggi, and which sent Saudi stock plunging, Trump said he “might,” impose a new round of tariffs on China, adding that while he has “great chemistry” with Chinese President Xi Jinping, and noting that Xi “wants to negotiate”, he doesn’t “know that that’s necessarily going to continue.” Asked if American products have become more expensive due to tariffs on China, Trump said that “so far, that hasn’t turned out to be the case.”

“They can retaliate, but they can’t, they don’t have enough ammunition to retaliate,” Trump says, “We do $100 billion with them. They do $531 billion with us.”

Trump was also asked if he wants to push China’s economy into a depression to which the US president said “no” before comparing the country’s stock-market losses since the tariffs first launched to those in 1929, the start of the Great Depression in the U.S.

“I want them to negotiate a fair deal with us. I want them to open their markets like our markets are open,” Trump said in the interview that aired Sunday. So far, the U.S. has imposed three rounds of tariffs on Chinese imports totaling $250 billion, prompting China to retaliate against U.S. products. The president previously has threatened to hit virtually all Chinese imports with duties.

Asked about his relationship with Vladimir Putin and the Kremlin’s alleged efforts to influence the 2016 presidential election, Trump quickly turned back to China. “They meddled,” he said of Russia, “but I think China meddled too.”

“I think China meddled also. And I think, frankly, China … is a bigger problem,” Trump said, as interviewer Lesley Stahl interrupted him for “diverting” from a discussion of Russia.

Shortly before an audacious speech by Mike Pence last weekend, in which the US vice president effectively declared a new cold war on Beijing (see “Russell Napier: Mike Pence Announces Cold War II”), Trump made similar accusations during a speech at the United Nations last month, which his aides substantiated by pointing to long-term Chinese influence campaigns and an advertising section in the Des Moines Register warning farmers about the potential effects of Trump’s tariffs.

Meanwhile, in a rare U.S. television appearance, China’s ambassador to the U.S. said Beijing has no choice but to respond to what he described as a trade war started by the U.S.

“We never wanted a trade war, but if somebody started a trade war against us, we have to respond and defend our own interests,” said China’s Ambassador Cui Tiankai.

Cui also dismissed as “groundless” the abovementioned suggestion by Vice President Mike Pence that China has orchestrated an effort to meddle in U.S. domestic affairs. Pence escalated the rhetoric in a speech Oct. 4, saying Beijing has created a “a whole-of-government approach” to sway American public opinion, including spies, tariffs, coercive measures and a propaganda campaign.

Pence’s comments were some of the most critical about China by a high-ranking U.S. official in recent memory. Secretary of State Michael Pompeo got a lecture when he visited Beijing days later, about U.S. actions that were termed “completely out of line.” The tough words followed months of increases tit-for-tat tariffs imposed by Washington and Beijing that have ballooned to cover hundreds of billions of dollars in bilateral trade.

During a recent interview with National Public Radio, Cui said the U.S. has “not sufficiently” dealt in good faith with the Chinese on trade matters, saying “the U.S. position keeps changing all the time so we don’t know exactly what the U.S. would want as priorities.”

Meanwhile, White House economic director Larry Kudlow said on “Fox News Sunday” that President Donald Trump and Chinese President Xi Jinping will “probably meet” at the G-20 summit in Buenos Aires in late November. “There’s plans and discussions and agendas” being discussed, he said. So far, talks with China on trade have been “unsatisfactory,” Kudlow said. “We’ve made our asks” on allegations of intellectual property theft and forced technology transfers, he added. “We have to have reciprocity.”

Addressing the upcoming meeting, Cui said he was present at two previous meetings of Xi and Trump, and that top-level communication “played a key role, an irreplaceable role, in guiding the relationship forward.” Despite current tensions the two have a “good working relationship,” he said.

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BREAKING: Explosion in Crimea, Russia kills many, injuring dozens, terrorism suspected

According to preliminary information, the incident was caused by a gas explosion at a college facility in Kerch, Crimea.

The Duran

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“We are clarifying the information at the moment. Preliminary figures are 50 injured and 10 dead. Eight ambulance crews are working at the site and air medical services are involved,” the press-service for the Crimean Ministry of Health stated.

Medics announced that at least 50 people were injured in the explosion in Kerch and 25 have already been taken to local hospital with moderate wounds, according to Sputnik.

Local news outlets reported that earlier in the day, students at the college heard a blast and windows of the building were shattered.

Putin Orders that Assistance Be Provided to Victims of Blast in Kerch – Kremlin Spokesman

“The president has instructed the Ministry of Health and the rescue services to take emergency measures to assist victims of this explosion, if necessary, to ensure the urgent transportation of seriously wounded patients to leading medical institutions of Russia, whether in Moscow or other cities,” Kremlin spokesman Dmitriy Peskov said.

The president also expressed his condolences to all those affected by the tragic incident.

Manhunt Underway in Kerch as FSB Specialists Investigate Site of Explosion – National Anti-Terrorist Committee

The site of the blast that rocked a city college in Kerch is being examined by FSB bomb disposal experts and law enforcement agencies are searching for clues that might lead to the arrest of the perpetrators, the National Anti Terrorism Committee said in a statement.

“Acting on orders from the head of the NAC’s local headquarters, FSB, Interior Ministry, Russian Guards and Emergency Ministry units have arrived at the site. The territory around the college has been cordoned off and the people inside the building evacuated… Mine-disposal experts are working at the site and law enforcement specialists are investigating,” the statement said.

Terrorist Act Considered as Possible Cause of Blast in Kerch – Kremlin Spokesman

“The tragic news that comes from Kerch. Explosion. The president was informed … The data on those killed and the number of injured is constantly updated,” Peskov told reporters.

“[The version of a terrorist attack] is being considered,” he said.

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10 percent of American F-22 fighter jets damaged by Hurricane Michael

Part of the reason the F-22’s were left in the path of the storm is that they were broken and too expensive to fix or fly.

Seraphim Hanisch

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Note to the wise: When a hurricane comes, move your planes out of the way. Especially your really expensive F-22 fighter planes. After all, those babies are $339 mil apiece. Got the message?

Apparently the US Air Force didn’t get this message. Or, did they find themselves unable to follow the message?

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The Washington Times reported Tuesday that between 17 and 20 of these top-of-the-line fighter jets were damaged, some beyond the point of repair, when Hurricane Michael slammed ashore on Mexico Beach, Florida, not far from the Tyndall Air Force Base in the same state. The Times reports that more than a dozen of the F-22 Raptor stealth fighter jets were damaged after being left in the path of the extremely fierce storm:

President Trump’s tour Monday of devastation wrought by Hurricane Michael took him close to Florida’s Tyndall Air Force Base, where more than a dozen F-22 Raptor stealth fighter jets were damaged after being left in the path of the powerful storm.

The pricey fighter jets — some possibly damaged beyond repair — were caught in the widespread destruction that took at least 18 lives, flattened homes, downed trees and buckled roads from Florida to Virginia.

The decision to leave roughly $7.5 billion in aircraft in the path of a hurricane raised eyebrows, including among defense analysts who say the Pentagon’s entire high-tech strategy continues to make its fighter jets vulnerable to weather and other mishaps when they are grounded for repairs.

“This becomes sort of a self-defeating cycle where we have $400 million aircraft that can’t fly precisely because they are $400 million aircraft,” said Dan Grazier, a defense fellow at Project on Government Oversight. “If we were buying simpler aircraft then it would be a whole lot easier for the base commander to get these aircraft up and in working order, at least more of them.”

This is quite a statement. The F-22 is held to be the tip of the American air defense sword. A superb airplane (when it works), it can do things no other plane in the world can do. It boasts a radar profile the size of a marble, making it virtually undetectable by enemy radars. It is highly maneuverable with thrust-vectoring built into its engines.

However, to see a report like this is simply stunning. After all, one would expect that the best military equipment ought to be the most reliable as well. 

It appears that Hurricane Michael figuratively and physically blew the lid off any efforts to conceal a problem with these planes, and indeed with the hyper-technological basis for the US air fighting forcesThe Times continues:

Reports on the number of aircraft damaged ranged from 17 to 22 or about 10 percent of the Air Force’s F-22 fleet of 187.

The Air Force stopped buying F-22s, considered the world’s most advanced fighter jets, in 2012. The aircraft is being replaced by the F-35, another high-tech but slightly less-expensive aircraft.

Later in the tour, at an emergency command center in Georgia, Mr. Trump said the damage to the F-22s couldn’t be avoided because the aircraft were grounded and the storm moved quickly.

“We’re going to have a full report. There was some damage, not nearly as bad as we first heard,” he said when asked about the F-22s, which cost about $339 million each.

“I’m always concerned about cost. I don’t like it,” Mr. Trump said.

Still, the president remains a fan of the high-tech fighter jet.

“The F-22 is one of my all-time favorites. It is the most beautiful fighter jet in the world. One of the best,” he said.

The Air Force managed to fly 33 of the F-22s to safety, but maintenance and repair issues kept 22 of the notoriously finicky aircraft on the ground when the powerful storm hit the base.

About 49 percent of the F-22s are out of action at any given time, according to an Air Force report this year.

This is a stunning statistic. This means that of the 187 planes in existence, 90 of them are not working. At their cost, that means that over thirty billion dollars worth of military equipment is sitting around, broken, just in airplanes alone.

As a point of comparison, the entire Russian military budget for 2017 was $61 billion, with that budget producing hypersonic missiles, superb fighter aircraft and tanks. Russian fighter planes are known for being able to take harsh landing and take-off conditions that would cripple the most modern American flying machines.

It would seem that Hurricane Michael exposed a serious problem with the state of readiness of American armed forces. Thankfully that problem did not arise in combat, but it is no less serious.

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